Vital-Gozon vs. Court of Appeals

A public officer who refuses or neglects, without just cause, to implement a final and executory Civil Service Commission order of reinstatement is personally liable to the aggrieved party for moral and exemplary damages and attorney's fees under Article 27 in relation to Articles 2217, 2219, 2229 and 2208 of the Civil Code.

Isabelita Vital-Gozon was the Medical Center Chief of the National Children's Hospital, while Alejandro S. de la Fuente was its Chief of Clinics since his appointment on December 20, 1978. Pursuant to Executive Order No. 119 issued on January 30, 1987 by President Corazon C. Aquino, reorganization of the various offices of the Ministry of Health commenced, with existing offices abolished and transfers of personnel effected. The Civil Service Commission exercised jurisdiction over protests against demotions arising from that reorganization, its resolutions becoming final upon lapse of the thirty-day period to appeal to the Supreme Court.

In the early months of 1987, reorganization of the Ministry of Health commenced pursuant to Executive Order No. 119. At that time, Dr. Alejandro S. de la Fuente was Chief of Clinics of the National Children's Hospital, appointed December 20, 1978 after serving as Medical Specialist I since 1971 and Medical Specialist II since 1977. On February 4, 1988, he received notice from the Department of Health that he would be re-appointed Medical Specialist II, which he considered a demotion by two ranks. He protested to the DOH Reorganization Board, and when ignored, brought the case to the Civil Service Commission as CSC Case No. 4, while the duties of Chief of Clinics were turned over to Dr. Jose D. Merencilla, Jr.

On August 9, 1988, the Civil Service Commission declared the demotion or transfer void and illegal, noting the hospital was not abolished and the position remained intact under the retitled Chief of Medical Professional Staff with substantially the same functions. It ordered that de la Fuente be retained or considered as never having relinquished the position without loss of seniority and be paid back salaries, transportation, representation and housing allowances and other withheld benefits. No reconsideration or appeal was taken, so the resolution became final on September 21, 1988. De la Fuente then sent two letters to Dr. Isabelita Vital-Gozon, Medical Center Chief, demanding implementation. She referred the claims to the DOH Assistant Secretary for Legal Affairs for advice, allegedly unaware when and how a CSC resolution becomes final, but did not answer de la Fuente even to inform him of the referral, choosing to await legal guidance while no one in the DOH acted.

After three months without compliance and fearing reversion of funds, de la Fuente asked the Commission to enforce its judgment but was told to file mandamus in court for lack of coercive power. On December 28, 1988, he filed in the Court of Appeals an action for mandamus and damages with preliminary injunction against Vital-Gozon and hospital administrative, budget and cashier officers, praying for a restraining order to preserve funds, preliminary and permanent mandatory writs to implement the CSC resolution, and P100,000.00 moral damages, P20,000.00 exemplary damages, and P10,000.00 litigation expenses and attorney's fees. The court required an answer and issued a temporary restraining order, granted respondents a fifteen-day extension through Atty. Jose Fabia, but no answer or opposition to injunction was filed. On February 2, 1989, de la Fuente filed a Supplemental/Amended Petition adding quo warranto against Merencilla as OIC Professional Service, praying that Merencilla be ousted and de la Fuente declared lawful de jure Chief of Clinics; again required to answer, respondents filed none. On June 9, 1989, the Court of Appeals ordered Vital-Gozon to comply with CSC Case No. 4 and Merencilla to cease acting as OIC, but denied damages as not cognizable in mandamus. Copies were received June 15, 1989, with no reconsideration or appeal by Vital-Gozon or Merencilla.

De la Fuente moved for reconsideration on damages, invoking Section 3, Rule 65 and B.P. Blg. 129, and separately moved for execution on July 4, 1989, which was granted July 7, 1989 with writ issued July 13, 1989. Compliance still not effected, he sought contempt on July 20, 1989; at the August 3, 1989 hearing, Vital-Gozon and Merencilla with counsel disclaimed intent to defy, attributed referral to superiors, and undertook immediate compliance. On August 9, 1989, Vital-Gozon reported that under Hospital Special Order No. 31 dated August 3, 1989 de la Fuente was directed to assume the Chief of Medical Professional Staff post and a voucher for allowances was being processed. On September 27, 1989, the Court of Appeals reconsidered, deleted the denial of damages, deemed the June 9, 1989 ruling a partial decision, and set reception of evidence on damages. New counsel and the Solicitor General challenged jurisdiction, but were denied on January 11, 1991 and August 7, 1991, leading to G.R. No. 101428 decided August 5, 1992 upholding jurisdiction over damages. After finality, the Court of Appeals received de la Fuente's evidence on December 7, 1995, wherein he testified he was greatly disturbed, shocked and frustrated during the three months before filing and during the pendency, suffered sleepless nights, mental anxiety, worry, tension and humiliation, incurred not less than P5,000.00 court fees and incidental expenses, and obligated P10,000.00 counsel fees. Vital-Gozon, whose September 10, 1992 Answer was refused admission on March 20, 1997 and on reconsideration April 21, 1997, opted to present no rebuttal evidence, and on May 7, 1997 the Court of Appeals awarded the damages now assailed.

• Absence of Moral Damages: Petitioner argued that there was absolutely no factual basis for moral damages because private respondent showed no causal connection between supposed injury and actionable wrong, offering only generalized statements of sleepless nights, mental anxiety, anguish, worry, tension and humiliation.
• Good Faith and Non-Involvement: Petitioner maintained that she had nothing to do with the Civil Service case as she was not yet connected with the hospital when filed, and failure to immediately reinstate was caused by the directive of the DOH Legal Department to which she forwarded the decision pursuant to standard procedure, thus she acted in good faith.
• Exemplary Damages and Attorney's Fees: Petitioner argued that she did not act with vindictiveness or wantonness, so exemplary damages were unwarranted and consequently there was no basis for attorney's fees.
• Official Capacity and State Immunity: Petitioner contended that she was sued in her official capacity and could not be held personally liable for damages, otherwise her right to due process as a private individual would be violated.
• Denial of Due Process by Non-Admission of Answer: Petitioner maintained that refusal to admit her answer denied due process because she attended hearings, the June 9, 1989 decision had declared the court not the forum for damages making an answer moot, jurisdiction was litigated until the August 4, 1992 Supreme Court decision after which she promptly filed her answer, and the court delayed acting until her turn to present evidence.

• Factual Version and Conclusiveness of Prior Findings: Respondent countered that petitioner's version was incomplete and slanted and that the factual findings in G.R. No. 101428 were conclusive and binding, so reliance thereon was proper.
• Personal Liability Despite Official Status: Respondent argued that invocation of state immunity was untenable as petitioner was sued not merely in official capacity, and even assuming otherwise, liability attached under Articles 20, 27 and 2176 of the Civil Code and Section 3, Rule 65 of the Rules of Court.
• Propriety of Non-Admission: Respondent maintained that the Court of Appeals did not err in denying admission of the answer filed long after the periods expired.
• Justification of Awards: Respondent argued that the awards of moral and exemplary damages and attorney's fees were proper, fair, reasonable, justified and in accord with law and precedent.

• Due Process: Whether petitioner was denied due process when her answer to the petition and supplemental/amended petition was not admitted and she was held personally liable though allegedly sued in official capacity.
• Damages Liability: Whether the awards of moral and exemplary damages and attorney's fees against petitioner were proper.

• Due Process: No. Failure to answer despite two court orders and an extension was attributable to petitioner's own fault, defenses were deemed waived, and she was afforded cross-examination and opportunity to present rebuttal evidence which she declined.
• Damages Liability: Yes. Refusal without just cause to perform the official duty to implement a final CSC reinstatement order caused compensable moral injury, warranting exemplary damages as correction for the public good and attorney's fees as actual damages.

• Due Process: The record showed formal requirements to answer the original petition within ten days and the supplemental/amended petition within ten days, plus a granted fifteen-day extension, yet no answer was filed before the June 9, 1989 decision. Challenge to jurisdiction over damages was raised only after the September 27, 1989 resolution, so it did not excuse earlier default, and under the Revised Internal Rules of the Court of Appeals the case was deemed submitted after expiry of the period. Denial of the September 18, 1992 answer after finality of G.R. No. 101428 involved no reversible error or grave abuse, especially since petitioner was allowed to cross-examine de la Fuente on damages and to present her own evidence but chose not to, and her pleaded defenses of suit against the State, good faith, and damnum absque injuria could have been ventilated through those avenues.
• Damages Liability: Restoration to the Chief of Clinics position was plainly due under the final CSC decision, and implementation was petitioner's duty as hospital head. Mere referral to the DOH Legal Department without answering de la Fuente's two demands, described as regrettably cavalier neglect, constituted refusal or neglect without just cause under Article 27. De la Fuente's credited testimony established sleepless nights, shock, frustration, anxiety, worry, tension and humiliation during the three-month delay and worsened suffering during litigation, plus P5,000.00 expenses and P10,000.00 counsel obligation, supporting P50,000.00 moral damages within judicial discretion under Articles 2217 and 2219. Exemplary damages of P20,000.00 were justified under Articles 2229 and 2233 as example to public officials bound by public trust, and attorney's fees of P10,000.00 followed under Article 2208 where exemplary damages are awarded and refusal of a plainly valid claim compelled litigation. Paragraph 16 of the petition expressly sought personal liability, refuting the claim of suit solely in official capacity.

• Liability of public officer for neglect of duty — Article 27 of the Civil Code provides that any person suffering material or moral loss because a public servant refuses or neglects without just cause to perform official duty may sue for damages, without prejudice to administrative action. Applied here to hold the hospital chief personally liable for failing to implement a final CSC reinstatement order despite clear language and repeated demands.
• Moral damages for acts under Human Relations — Moral damages under Articles 2217 and 2219 include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury, recoverable when proximate result of wrongful act or omission, including acts under Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35. Applied to compensate de la Fuente's testified anguish caused by unjustified refusal to reinstate.
• Discretion in fixing moral damages — Moral damages being incapable of pecuniary estimation, courts fix the amount in discretion and are not bound by claimant's assessment; failure to quantify value is no bar where testimony supplies factual basis. Applied to sustain P50,000.00 despite absence of quantified valuation.
• Exemplary damages and attorney's fees — Exemplary damages under Article 2229 may be imposed by way of example or correction for the public good in addition to moral damages, and under Article 2233 are not recoverable as matter of right but in court discretion; attorney's fees under Article 2208 may be recovered when exemplary damages are awarded, defendant acted in gross bad faith refusing a plainly valid claim, or deemed just and equitable. Applied to award P20,000.00 exemplary damages against a public official as deterrent and P10,000.00 attorney's fees.
• Accountability of public officers — Section 1, Article XI of the Constitution declares public office a public trust and requires accountability, utmost responsibility, integrity, loyalty, efficiency, patriotism, justice and modest lives. Read with Article 27 to underscore vulnerability of officials to damages for misfeasance, malfeasance or nonfeasance, even for legal acts done in bad faith under abuse of rights.
• Effect of failure to answer in special civil action — After expiration of the period for answer or reply, the case is deemed submitted for resolution, unpleaded defenses are deemed waived and allegations deemed admitted under Sections 1, 2 and 4, Rule 9. Applied to bar the answer filed in 1992 after periods expiring in January 1989 and after finality of the liability ruling.

• "Art. 27. Any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against the latter, without prejudice to any disciplinary administrative action that may be taken." — States the controlling statutory basis for personal liability of petitioner for non-implementation of the CSC order.
• "Sec. 1. Public office is a public trust. Public officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives." — Defines the constitutional accountability standard read with Article 27 to justify damages against a public officer.
• "To all these, her reaction, and that of the officials of the Department of Health concerned, was a regrettably cavalier one, to say the least." — Characterizes petitioner's disregard of the CSC resolution, demands, and court processes as neglect without just cause supporting liability.
• "Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. They may be recovered if they are the proximate result of the defendant's wrongful act or omission." — Formulates the rule for recovery applied to de la Fuente's testified sufferings.

• San Luis vs. Court of Appeals, 174 SCRA 258 — Cited as point authority where a governor's unlawful suspension and obstinate refusal to comply with final CSC and Office of the President decisions rendered him personally liable for P50,000 moral damages and P20,000 attorney's fees and litigation expenses.
• Tan Kapoe vs. Masa, 134 SCRA 231 — Cited to show moral damages may rest on documentary evidence without supporting oral testimony and exemplary damages may be awarded even if not expressly pleaded, as correction for public good in addition to moral damages.
• Llorente vs. Sandiganbayan, 202 SCRA 309 — Cited for the proposition that under Articles 19 and 27 a public official may pay damages even for a perfectly legal act done in bad faith or in violation of abuse-of-right doctrine.
• Urbano, et al. vs. Chavez, et al., G.R. No. 87977 and Co vs. Regional Trial Court of Pasig, G.R. No. 88578 — Cited by the Court of Appeals to prohibit the Solicitor General from representing Gozon on the personal damages claim.
• Cariño vs. Agricultural Credit and Cooperative Financing Administration, 18 SCRA 184 and Animos vs. Philippine Veterans Affairs Office, 174 SCRA 214 — Cited by petitioner to argue suit in official capacity barred personal liability; rejected upon examination of the petition's express prayer for personal liability.

• Article 27, Civil Code — Allows action for material or moral loss against public servant refusing or neglecting without just cause to perform official duty; applied to petitioner's failure to implement final CSC reinstatement.
• Articles 2217 and 2219(10), Civil Code — Define moral damages and list recoverable instances including acts under Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35; applied to award for mental anguish and humiliation.
• Articles 2229 and 2233, Civil Code — Provide exemplary damages as correction for public good and leave award to court discretion; applied to impose P20,000.00 as deterrent to public officials.
• Article 2208, Civil Code — Authorizes attorney's fees as actual damages when exemplary damages awarded, bad faith refusal of valid claim, or just and equitable; applied to award P10,000.00.
• Section 1, Article XI, Constitution — Enshrines public office as public trust and accountability; read with Article 27 to sustain liability.
• Section 3, Rule 65, Rules of Court — Authorizes mandamus to command performance and to pay damages sustained by reason of wrongful acts; relied upon to uphold Court of Appeals jurisdiction over damages.
• Section 9, Batas Pambansa Blg. 129, as amended — Confers concurrent original jurisdiction on Court of Appeals to issue mandamus and conduct hearings; basis for damages proceedings.

Bellosillo, J., Vitug, J., Panganiban, J. and Quisumbing, J., concur.